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Bank of America, Citigroup report billions in losses

Bank of America, Citigroup in Florida

Bank of America has a huge branch system operating statewide, while Citigroup is more clustered in office parks, providing back-office support services. Here's a glimpse of each institution in the state:

Bank of America: 2,070 locations and thousands of employees across Florida. No. 2 in the state in deposit market share behind Wells Fargo (still operating under the Wachovia name in Florida).

Citigroup: About 12,000 Florida workers, including 3,200 in the Tampa Bay area, ranging from the Smith Barney brokerage (which it is handing off to Morgan Stanley) and CitiFinancial branch offices to a financial services campus in New Tampa. Tampa Bay's Citigroup employees work in 30 different business groups. On Friday, Citigroup spokeswoman Janis Tarter gave only a general statement about the company's operations in the state given the plan to split the company into Citicorp and the separate Citi Holdings: "Tampa and Florida remain important to Citi overall, and we remain committed to the Tampa community."

NEW YORK — The hemorrhaging among the nation's biggest banks was supposed to have subsided after the government doled out $350-billion in federal bailout money last fall. That hasn't happened.

Instead, both Bank of America Corp. and Citigroup Inc. have had to turn to the government for more cash.

Citigroup on Friday reported a fourth-quarter $8.29-billion loss and announced it is splitting itself in two. Bank of America reported a $2.39-billion fourth-quarter loss, hours after ironing out a deal for a fresh $20-billion lifeline needed to digest troubled brokerage Merrill Lynch. Both banks have now taken $45-billion apiece in bailout money.

The ongoing losses and scramble for more cash have sent bank stocks into a free fall as investors worry about more problems ahead — and the ramifications of an even bigger government role in trying to solve them.

The problem, analysts say, is that banks are still saddled with shoddy assets associated with subprime home mortgages, commercial mortgages and leveraged loans. As the economy gets worse and sheds more jobs, consumers and businesses increasingly are defaulting on these loans, eliminating banks' revenue streams.

"The banks still have to account for sins of the past — the bad assets," said Bert Ely, an independent bank analyst. "Now with the bad economy, that causes even more losses and you get bigger and bigger holes in the balance sheets."

Bank of America, Citigroup report billions in losses 01/16/09 [Last modified: Friday, January 16, 2009 10:39pm]

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